KEY CONCERNS OF EXECUTIVES
MAKING IS DECISIONS
Stuart E.
Y.
February 1987
Madnick
Richard Wang
#VP 1861-87
Key Concerns of Executives Making IS Decisions
ABSTRACT:
Inquiry of the nature
of
other
(IS)
system
information
executives'
concerns can provide insight for IS decision makers
to
new
develop
IS
organization strategically.
study o
and
infrastructures,
to
position
their
This paper reports the results of a
several hundred executives making IS decisions.
The study indicates that IS executives are
on
attention
connectivity,
emerging
and
technologies
voice/data)
with
(such
strategic
focusing
as
their
networking,
implications.
as organizations evolve, the executives' focus moves
Meanwhile,
from structured operational and computational concerns, such
backlog
and
security,
as
within the organization to unstructured
temporal and strategic issues in the environment.
These results further suggest a three phase
networking
(phase
1)
provides
process
the backbone structure for the
connectivity of diverse, and often incompatible, systems
2)
which
in
turn
computing (phase 3).
where
(phase
makes available opportunities for strategic
PAGE 1
1
INTRODUCTION
"My job is to provide an effective and
system
to
meet
the
corporate
executive vice president
service
company
results,
of
efficient
delivery
needs,"
says the
information
a
major
service
company.
was reorganized in 1986 to achieve synergistic
primarily
centralization
through
including
host computers, local and remote networks,
sites
communications,
Performance
security
office
systems,
and
central
voice and data
departmental
computing
(capacity, response, reliability, availability) and
are
results,
"The
as
crucial
to
is
introduction of new technology.
the
the
successful
achievement
of
Our IS
organization is being viewed as non-responsive due to (1)
backlog,
(2)
unclear role/responsibility of IS vs.
(3) micro computers which cannot connect to our
need
to
know
what
options
deployment of our resources,
those
deployment,
and
are
effective
the
large
users, and
mainframe.
for
the
We
future
for the expedient implementation of
for
the
strategic
capitalization
of
market-driven opportunities."
In effect, this executive vice president was expressing the
thoughts of many other executives who are responsible for making
information
systems
(IS)
significant
advances
in
industries have
business
created
applications.
and capabilities of new
improve
decisions.
the
a
computer
wide
range
In
and
of
recent
years,
telecommunciation
opportunities
for
The price, speed-performance, capacity,
information
technologies
continue
to
rapidly, and there appears to be unlimited IS potential
that can be exploited to meet corporate information needs and to
Page 2
realize the opportunities.
a wide array of issues.
prioritize,
As quoted above, these concerns span
The capability to
clearly
and predict major IS issues will help executives to
focus attention and energy in making difficult
the
understand,
decisions
about
commitment of their limited resources that will result in a
higher return on investment in
competitive
information
the
era.
ever
However,
more
innovative
and
a widely accepted and
current assessment of the important IS issues may not be easy.
It is worth noting that oftentime it is
the
issues that become the biggest concerns over time.
less
obvious
For example,
five years before the personal computer emerged as a major force
for facilitating end-user computing, there was little discussionof awareness of its potential impact [Dickson et.
With
the
restructuring
of
the
al.
communication
1984].
industry, some
companies have seen attractive new options [Clemons and McFarlan
1986].
In effect, the innovative technologies of communications
and computers seem to increasingly redefine the competitive game
for companies of all sizes.
Are executives concerned
formulating
issues?
strategies?
about
How
are
To answer these questions,
literature
and
interviewed
emerging
they
the
technologies
related
authors
to
in
other IS
examined
the
(over a period of nine months) key
executives making IS decisions.
2
KEY EXECUTIVES' IS CONCERNS
Issues that surfaced from the
interviews,
such
as
those
Page 3
cited
by
the
executive vice president earlier, can be grouped
into four clusters of IS concerns:
1) inter and intra organizational computing (such as networking,
connectivity of diverse systems, and strategic computing),
2) management of change (such as introduction of new technology,
deployment of resoures, and voice/data integration),
3) distributed processing (such as
vs.
performance,
centralization
decentralization, and departmental computing), and
4) operational issues (such as security and backlog).
Figure 1 suggests a functional
clusters
of concerns:
relationship
of
the
four
as organizations evolve, the executives'
focus moves upward from the basic operational and
computational
concerns
temporal
within
the
organization
to
critical
and
strategic issues in the environment.
Based on these interviews, a questionaire was
rank
the
were
collected
designed
to
importance of key subtopics in each cluster, and data
summarized
from
over
three
hundred
executives.
As
in Table 1, the statistics support the clustering of
issues surfaced in the initial study.
organizational
computing
Moreover, inter and intra
subtopics
received
the
highest
.rankings.
Correlations were calculated for
the
key
subtopics,
and
significance of these correlations were tested [Sachs, 1984], as
shown
in
Figure
correlation
2.
A
circle
indicates
that
the
is significant beyond 99.99% level of confidence, a
medium circle for 99.9%,
_111
large
and
a
small
circle
__
for
99%.
The
PAGE 4
ORC
LO
Figure 1 Functional Relationship of IS Concerns
PAGE 5
Table 1: List of Issues By Executives Making IS Decisions
MEAN
CLUSTERS
OF ISSUES
SD
MED
FIRST
QUART
THIRD
QUART
% AS TOP
CONCERNS
I. INTER AND INTRA ORGANIZATIONAL COMPUTING
I.1
Networking
8.57
1.78
9.00
8.00
10.00
42.63
1.2
Connectivity of
Diverse Systems
8.25
2.10
9.00
7.50
10.00
39.18
1.3
Strategic
Computing
7.91
2.12
8.00
7.00
10.00
29.15
II. MANAGEMENT OF CHANGE
II.1
Introdution of
New Technology
7.98
1.75
8.00
7.00
9.00
24.13
II.2
Resources
Deployment
7.57
2.05
8.00
6.00
9.00
20.38
II.3
Voice/Data
Integration
7.07
2.34
7.00
6.00
9.00
16.61
III. DISTRIBUTED PROCESSING
III.1 Performance
7.24
2.12
8.00
6.00
9.00
17.87
III.2 Centralization
& Decentration
6.87
2.38
7.00
5.00
9.00
15.36
III.3 Departmental
Computing
6.80
2.27
7.00
5.00
9.00
13.17
IV. OPERATIONAL ISSUES
IV.1
Security
6.28
2.29
6.00
5.00
8.00
0.72
IV.2
Backlog
5.72
2.34
6.00
4.00
7.00
0.53
MEAN: Mean value (10 = extremely important, 1 = don't care)
SD: Standard deviation of rank scores
MED: Median value of rank scores
FIRST QUART: First quartile; THIRD QUART: Third quartile
% AS TOP: % who rank the issue as most important (Note: may total
more than 100% due to ties for top rating by some executives)
____IY___^__C__C____n_____YII·-----^
·s_·___llhXi--·l_-LII-
______
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1.1
Networking
1.2
Connectivity of
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Diverse Systems
1.3
Strategic
Computing
II.1
Introdution of
New Technology
II.2
Resources
Deployment
11.3
Voice/Data
Integration
III.1 Performance
111.2 Centralization
& Decentration
II.3 Departmental
Computing
IV.1
Security
IV.2
Backlog
Significant beyond 99.99% level of confidence
Significant beyond 99.9%
level of confidence
Significant beyond 99% level of confidence
Figure 2
Matrix of Significant Correlations Among Subtopics
6
PAGE 7
implications
the rankings and correlations are discussed in
of
the following sections.
Inter And Intra Organizational Computing
2.1
Of most importance to the executives interviewed are
computing
organizational
intra
and
inter
specifically
topics,
networking, connectivity, and strategic computing.
a
"There is an opportunity for us to save money by sharing
network, "
common
and
management
says
services.
are
Businesses
a manager in charge of program planning
diverse
company
and
linked
consolidation,
(financial
requirements
"Our
is
decentralized.
for
corporate
personel
systems
only
Presently, we have four major data centers with each
planning).
Cost of
data center having separate telecommunication networks.
communication
and
the
fact
that
each
business
communications network that often 'cross one another'
ever closer to a 'corporate network'.
uses
data
leads
us
The cultural implications
and management challenge of such a network seem overwhelming."
"The issues surrounding networking have become increasingly
more
diverse
with
the proliferation of network strategies and
the offerings now available," says the director of the computing
services and communication systems of a major retail chain.
is
most
difficult
established
and
to
determine
Given
adopted.
communication network spanning
remote
distributed
input
which
some
our
1400
standard
will
requirement
business
for
units,
"It
be
a
25
centers as well as international and
PA=
I
domestic data centers, it is difficult to select the appropriate
connection
media
which
remains
cost
effective
for
the
technologies installed at each location."
support
"Connectivity and networking are very important to
our
new
divisional
and
organization,
to
help our divisions
says
expand into new, non-aerospace products and markets,"
vice
president
who
is
in
the
charge of the information resource
management function of a major aerospace corporation.
"Optimal utilization of corporate hardware and
application
assets in a multi-vendor, typically incompatible, environment is
critical to the company," says the
"Without
corporation.
network
integration,
CIO
connectivity
the
strategic
of
of
a
major
diverse
information
financial
systems
via
run
our
to
business cannot be accessed or delivered to all personnel within
We are reviewing a number of operational
the company.
opinions
from various information management driven companies."
"Strategic computing involves future technology directions,
sophisticated networking and telecommunication, utilizing large,
centralized database environment, and effectively investments in
hardware," says the director of a health care institute.
"It is
a powerful weapon in gaining and keeping a competitive edge over
our
health
technology
care
to
link
competition.
hospitals,
Our
clinics,
organization
physicians,
uses
IS
nursing
homes, and other affiliates together to form the complete family
of health care providers and products."
PAG
Networking, connectivity,
telecommunication
technologies
(Clemons and McFarlan, 1986;
Millar,
1985;
and
strategic
have
EDP
computing .using-
become
Analyzer,
9
topical
1986;
issues
Porter
and
Cash and McLeod, 1985; Cash and Konsynski, 1985;
McFarlan, 1984].
McFarlan [1984]
showed
how
companies
could
deploy their IS resources to implement competitive strategies as
defined
by
Porter.
information
Porter
technology
and- Millar
[19851
found
that
is changing the rules of competition in
the following three ways:
1) changing the
2)
advantage; and 3) spawning completely
creating
competitive
new businesses.
industry
structure;
Our study confirms that these issues are at the
forefront of executives concerns.
43% of the executives cited networking as the
facing
their
top
concern
organizations with a mean rating of importance of
8.57 on a 10-point scale as shown in
connectivity
as
the
Table
1.
39%
mentioned
top concern, with a mean of 8.25.
29% of
the executives cited strategic computing as the top concern with
a
mean
of
7.91.
Moreover, the correlation between networking
and connectivity is statistically significant.
suggest
a
computing.
structure
likely
evolution
3
we
of inter and intra organizational
Networking (phase 1) provides the necessary backbone
for
the connectivity of diverse, often incompatible,
systems (phase 2) which in term
makes
for strategic computing (phase 3).
_
In Figure
1111_
available
opportunities
PAGE 10
VALUE-ADDED
AL
S trategic
'.Coimputing
COMPETITIVE
ADVANTAGE
COORDINATION
AMONG
SYSTEMS
BACKBONE
COMMUNICATION.
STRUCTURE
....
Applications,
.........
I
A^^^en1;Je
. Connectivity
m
.......... It
Networking ooo...
.......................
Ii
I
Phase I
/
p......,
A
payroll and
personnel data
Other Applications,
e.g. terminal access
to remote systems
to remote systems
I
I
Phase II
I
I
*
v
TIME
Phase III
Figure 3 Evolution of Inter and Intra Organizational Computing
PAGE 11
From the perspective of Figure 3, our study indicates
most
of
the
executives
surveyed
are
at
phase
networking as most critical currently, though
1
that
and view
connectivity
and
strategic computing are also viewed as extremely important.
Two
plausible reasons for the relative importance of networking
are
as
the
follows:
(1)
it
is
a
necessary
connectivity needed for many strategic
(2)
it
prerequisite
applications,
for
and
also
can provide other advantages such as reducing redundant
communication
costs,
facilitating
many
consolidating
-hardware
usage,
and
operational requirements, such as convenient
terminal access to remote systems.
As the backbone network structure settles in, an increasing
number
of these executives will likely address connectivity and
strategic computing issues more vigorously.
high
correlation
between
Although there is a
networking and connectivity shown in
this study, the role of networking and connectivity in
to
strategic
computing is not consistently understood by these
executives as evidenced by the correlations depicted
2.
This
relation
may
be
because
some
progression from networking (phase
executives
1)
to
in
Figure
envisage a direct
strategic
computing
(phase 3), whereas others explicitly understand and see benefits
in the intermediate requirement for connectivity (phase 2) which
facilitates
not
only
many
enhances many operational
strategic
applications,
payroll and personnel data.
__
_
applications
such
as
but
also
consolidated
PAGE 12
a
organizational
intra
networking,
from
evolving
to
systems,
incompatible
diverse
of
connectivity
and
inter
America
corporate
in
computing
of
deployment
significant
witness
will
It is prognosticated that the next decade
strategic
computing.
2.2
Management Of Change
of
Management
technology,
as
(such
change
new
of
introduction
deployment of resources, and integration
effective
the
to
crucial
of voice and data) is also
of
survival
many
organizations.
"In terms of function, our systems are
available,"
the
says
major
services division of a
systems
are
vice
senior
technologically
deficient
and
-
of
information
"However,
bank.
midwest
systems were developed prior to 1970.
trends
president
richest
the
among
the majority of the
competition, it is critical to develop a new
local
tools.
and
wide
Because of industry
integrated deposit system employing the latest technology
techniques
those
undertaking will be the
One
of
the
key side effects of this
propagation
rapid
based
of
new
technology
throughout the division."
"Deployment of resources is a very timely
the
division
manager
telecommunication
optimum
results
of
company.
in
network
question,"
says
of
major
engineering
"Configuration
of
a
computers
for
our organization consists of five separate
systems interconnected by LAN's.
Also there
is
joint
use
of
PAGE 13
terminals
have limited investment now, but we must make major
soon
on
the
organization
We
emerging CAD/CAE systems and other purposes.
for
resources
corporate
years.
for
which
of
Deployment
will
commitments
the
impact
expands
resources
organizational responsibility."
"Technology
connectivity,"
is
in
says
the
place
for
universal
director of communication information
techology services at a leading university in
has
hard to effectively exploit this foundation in
individual
The
department,
group,
endeavor
will
a
provide
which
California
installed a new $21M telecom system.
just
voice/data
"We are working
the
of
context
and institutional productivity.
new
infrastructure
the
for
university to keep its leadership."
ranked
24% of the executives interviewed
new
technology
as
top concern facing their organizations
the
with a mean of 7.98, and 20% for
mean
of
concern
7.57,
with
correlations
18%
a
ranked
mean
exist
of
resources
voice/data
7.1.
between
In
deployment
viewed
as
specific
also
a
addition;
significant
introduction of new technology and
instances
correlation between voice/data
with
integration as the top
networking, connectivity, and voice/data, suggesting
are
of
introduction
of
that
new technologies.
integration
and
networking
they
The
is
significant, indicating the consensus that voice/data goes
with networking.
PAGE 14
Many MIS/DP organizations mentioned management of change as
a
success
critical
factor
technological planning to make it as non-disruptive as
up
introduction of new IS technologies has opened
for
opportunity
potential
forging
for
a
singular,
a company to redeploy its assets and
The technology has given the organization
rethink its strategy.
the
possible
McFarlan [1984] suggested that, "in many cases,
[Martin, 1982].
one-time
range
long
involves
which
sharp
tools that can produce
new
lasting gains in market share."
being
In sum, many forms of technology are
numerous
vendors.
transmission,
by
Yemini and Misholi [1983] suggested that the
integration of voice with 'the digital world'
the
introduced
is
occurring
It is
communication, and processing levels.
important to establish a direction for the acquisition
at
and
use
of new information technology based on an improved understanding
of burgeoning technologies
and
methods
for
delivery
in
the
business environment.
2.3
Distributed Processing
Performance,
decentralization,
says the director of a Philadelphia hospital.
"The
time
are
critical
systems
well as its existing data transmission lines of its on-line,
real-time patient care system running at the
the
"System
our
response
hospital is currently evaluating its existing telephone
as
and
to
terminal
and
operation,"
vs.
computing are the next catagory of focus.
departmental
up-time
centralization
hospital.
two
locations
of
Providing fast, accurate, and reliable services
PAG
15
is critical."
"Centralization and decentralization is
the
director
issue!"
says
of systems development and operations of a highly
decentralized pharmaceutical company.
changes
the
"We
experienced
several
in our organization at the management committee level -
hence there have been some pendulum swings in directions.
It is
very difficult to coordinate, realize any economies of scale, or
standardize operations without architectural guidelines."
"Departmental computing is a trend in informance services,"
says the vice president and manager of information services of a
major bank.
"It is growing rapidly with business/market
strategies.
We
need
to
driven
better prepare management to get the
most out of this new trend."
17% of the executives interviewed cited performance as
the
top concern facing their organizations with a mean of 7.24.
15%
mentioned
top
concern
centralization
with
vs.
a mean of 6.87.
as the top concern
significant
with
correlation
centralization
vs.
a
decentralization
as
the
13% cited departmental computing
mean
of
between
6.8.
There
departmental
decentralization,
is
also
computing
suggesting
that
a
and
they
should be considered together.
Price,
have
been
decades.
speed-performance,
the
reliability,
and
availability
primary goals of information systems design for
Research has been conducted to design large
cost-effective
systems
with
rapid
Wang, 1986; Goyal and Agerwala, 1984].
1___^1_1_______ __
response time
In the
capacity,
Madnick and
private
sector,
16
PAGE
commercial
database
Teradata's
DBC
machines, such as Britan Lee's IDM 500 and
(Computerworld,
012
1985],
specialized'
to
information management have been introduced.
Centralization and decentralization has also been discussed
extensively
for
almost
a
decade.
Rockart [1978] provided a
framework for analysis of centralization
The
framework
consists
of
three
and
major
dimensions:
operations, systems development, and systems
interesting
al.
to
decentralization.
systems
management.
It's
that the 1984 Delphi study by Dickson et.
note
did not explicitly rank centralization and decentralization
as an important IS issue.
In sum, issues in distributed processing have been gathered
around the efficient and smooth operation to meet organizational
information needs responsively.
2.4
Operational Issues
One interesting result was that very few
operational
issues,
such
as
concern in their organizations.
executives
cited
security and backlog, as the top
Although they may not have been
a top concern, many executives did view them as important.
"There is increasing pressure on security from users within
the
corporation,
customers,
and suppliers because of the need
for more electronic data exchange," says the director of a
corporation.
rail
PAGE 17
not
"A number of applications will
until
implemented
be
into the 1990's," says the general director of information
well
"Other
systems of a brewing company.
prioritization
for
considered
been
staffing level, will most probably not be
1990's.
to
department
systems
information
management
top
Consequently,
be
given current
and,
...
not
have
items
backlog
the
until
addressed
strongly perceives the
rather
lethargy
than
thrusting."
"There is
director
of
than
corporate business systems.
However, we would like
setting priority.
adding
work
more
always
productivity
Some
staff...
fourth
productive as venders claimed and
says
resources,"
the
"We have a method for
to
more
do
products
are
without
not
as
languages
generation
are not realistic for high volume transaction systems."
It is not uncommon for organizations to have a
development backlog ranging from one to four years.
application
Wang [1986] reported "infinite"
corporation.
fact,
In
the
and
opportunities
and
responsibilities
various
in
a
major
user
I
IS
groups is needed to optimize
Definition
of
roles
and
provision of tools to facilitate end-user
development must be clarified as much as possible.
L
computer
A cooperative effort between
potential.
and
backlog
the problem of backlog and security is
both technical and behavioral.
personnel
significant
__
PAGE 18
In
our
study,
although
backlog
did
receive
a
mean
importance of 5.72, less than .1% of the executives identified it
as their top
concern.
participants
noted
In
above
view
and
of
the
comments
the
from
perception of
traditional
may
applications backlog as a major challenge, this finding
in a recent study of 120 senior executives
and
and
could
explain
dispersion
actually
reported
by
Arthur
[1] where applications backlog was ranked 15
Co.
on a list of 22 concerns.
that
be
In fact, this finding is paralleled
viewed as quite surprising.
Anderson
some
of
There are two related forces at
this reaction:
software
work
(1) new productivity tools
development
to
end-users
have
lessened the magnitude of the backlog faced by many IS
organizations, thereby reducing
its
emergence
concerns
of
previously,
new
such
important
as
strategic
importance,
that
computing,
and
did
(2)
not
the
exist
connectivity,
and
networking, has pushed backlog even further down the list.
3
FOCUSING ON KEY ISSUES
The recent years have witnessed
the
IS
field.
governmental
In
units,
effect,
or
all
nonprofit
revolutionary
enterprises
changes
in
(be they firms,
organizations)
face
a
technological revolution in capabilities of information storage,
manipulation,
and
communication.
The
revolution
is
moving
rapidly from the backoffice functions such as payroll, personel,
budget, to the basic strategy and products of the enterprise.
PA
19
A key to success for an executive will be the capability to
clearly understand, prioritize, and predict major IS issues.
noted
by
the
chief
corporation:
"It
executive
is
of
the
stake is the company's future.
strategic
options,
and
of
a
major
As
manufacturing
utmost concern to me because at
Articulate key
implement
new
IS
issues,
develop
infrastructures to
compete globally will be the only way the company can survive in
today and tomorrow's world."
This
study
indicates
that
key
executives
making
IS
decisions tend to focus their attention on emerging technologies
with
strategic
implications
organizational
computing
computing.
is
based
on
a
to
facilitate
Value
adding
backbone
inter
to
and
that
communication
intra
chain
of
network
(underpining new IS infrastructures), connectivity among diverse
systems, and
finally
redefinition
of
strategic
options
for
competitive advantage.
Acknowledgements
The authors wish to acknowledge John J.
inspiration
of the study, Jay F.
advice, Yang W.
versions
of
writing
the
Donovan
paper,
paper.
and
Special
his
Nunamaker for his support and
Lee for her valuable comments
the
for
Yufen
thanks
on
the
earlier
Lin for her assistance in
are
extended
to
the
executives who participated in our study and provided the survey
data that made this paper possible.
PAGE 20
4
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2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
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